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I am very confused by how the gold and gem exchange rate works in guild Wars 2. I want to understand it a little better so I can optimize the amount of Gems I can get and when to best buy it.

First of all, can someone help me understand how the graph works? I stared at it for a couple minutes and down really understand it.

Also, according to a developer interview:

ArenaNet will set the initial exchange rate for gems to gold when the servers first open for headstart, but after that the rate will fluctuate based on supply and demand of the players using the Currency Exchange. The gems and gold players get from the Currency Exchange are supplied by other players, not ArenaNet. As supply of gems goes up, the price will go down and vice versa. While we do not expect prices to fluctuate wildly, smart traders will be able to get good deals by watching the exchange rate closely and waiting for it to favor gems or gold, whichever they are looking to purchase.)"

This makes almost no sense, specifically the part about the gems being supplied by other users, since it seems to imply that an initial amount of gems are introduced into the economy with the initial set exchange rate and as the gems pass into the hands of the players the rate goes up or down depending the demand. But how does this work if gems are being spend on the "freemium" items? Are more gems introduced into the economy to compensate for the gems that was just spent?

Or does it have a law sort of like the conservation of energy which means no gem is destroyed. There is a set amount of total gems and as it is used, it gets queued to be sold again by the anet on the trading post. If that is the case does that mean as more players play GW2, the demand for this set amount of gems would increase thus increasing its value?

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As far as I understand it, they hired an economist to set up the system. You probably can think of it like exchange rates with real currencies. –  Tom Kerr Sep 16 '12 at 3:54
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8 Answers 8

up vote 12 down vote accepted

You can pay real money to purchase gems, which introduces new gems to the system and balances out those gems spent on gem store purchases. If the rate at which gems are spent outpaces the rate at which they are bought, the total number of gems in circulation will decrease, and the gold:gem ratio will increase until it reaches a point at which people are more willing to spend real money on gems than to pay the exorbitant gold prices for gems. In this manner a balance would be maintained in the number of gems in the system.

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Er, what what the downvote for? Edit: Ah, misclick? Or did my clarification edit improve it that much? –  SaintWacko Sep 7 '12 at 19:25
    
I downvoted because your original answer didn't address the exchange rate. Downvote rescinded. –  sjohnston Sep 7 '12 at 19:27
    
@sjohnston - Yeah, I realized as soon as I posted it that it addressed the issue of total gems in the system, but not how the price was calculated. –  SaintWacko Sep 7 '12 at 19:30
    
This still doesn't really address the actual mechanism by which the exchange rate is set. Is it based on the total number of gems in existence? The ratio of gem purchase to gem sale over a given period of time? Is it even a zero sum game, or could we still buy gems for gold (at a high price) even if nobody was selling? –  sjohnston Sep 7 '12 at 19:32
    
I'm having a bit of trouble doing any research on this at the moment. I'm at work, and IT recently acquired a Sonicwall filter. They've gone slightly power-mad. I would presume that when a server opened, Anet injected a certain amount of gems into that server. That would provide an initial stock, and then the price would fluctuate based on how many gems players had sold into the system. I don't think you would be able to purchase any gems if it ran out, not for gold, at least. When I'm able to find proof for (or against) any of this, I'll move it into the answer. –  SaintWacko Sep 7 '12 at 19:38
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It's a pseudo economy towards Anet's favor. The graph under gem is the average/lowest/highest purchase price for 100 gems. Basically it works like this, you trade 2 apples for 4 oranges but you can only always trade 4 oranges for < 2 apples. See how that works? In real economy the exchange rate of apples/oranges can differ and fluctuate where sometimes apple is higher and sometimes orange is. However, in GW2's economy the apples (in-game gold) will always be higher than oranges (gems), i.e. if you trade 10 silvers for 39 gems, 39 gems will always trade for < 10 silvers. The exchange rate may vary but the relationship will not, for example, at some point it may be 10 silvers for 35 gems instead of 39 but 35 gems will always trade for < 10 silvers. There's really no point of keeping track because you can never win, I'd say 10 silvers for > 37 gems would be a good deal.

Furthermore, this is what I think how the gold/gem exchange rate is set: depends on how many people give money to Anet for gem and use that gem to buy gold. Ultimately Anet is a for profit company, the economy has to work towards their advantage. Regardless, it is still better than a lot of other game, at least it allows you to not spend real money but get the same benefit by investing time.

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It is my theory that ArenaNet is directly controlling the values.

In the normal buy sell economy, a player has a choice when selling or buying an item. They can choose to take the offer made available to them, or they can make their own better counter offer. The Gold/Gem exchange does not offer the option to make a better deal, it is directly forcing you to accept the value the company is placing on gems.

From what I can tell, there is no player interaction involved. It's simply you buying and selling to Anet. They likely have a complex program that tracks the number of gems purchased for $ and how many of those gems are being traded for gold and bases prices on this model with a substantial markup on players who are trading gold back into gems.

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You're correct that the system doesn't operate on an "offer" system (which would be closer to how the trading post works, for example). But we don't directly manipulate the stocks or the rates (my source for this being that I work at ArenaNet). –  Josh Petrie Oct 11 '12 at 7:19
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Its pretty simple, loads of people sell their gems for gold, the gems get cheaper, people start buying all these cheap gems until theyre running low, they go back up, nice way to profit if you keep your eyes open

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Just so you know, the currency exchange is rigged in guild wars 2. Dump all your money into your bank then look at the rates, they are crazy low, then pull all your money to your pocket, the rates go up like crazy. as of 3/1/2013 when i am empty pocket, its 1g 59s for 100 gems, and it goes up by 80s per 5g i add in my pocket

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The way the economy works i have to assume that Anet always has more gems than gold in stock and i assume that is because anet is producing gems to cover the demand for real money > gems which then returns to anet via items or gems to gold. On the other hand i do not think they produce gold at the same ammount thus they always want more gold than gems and thus the exhange rate gems for gold will always be lower than gold for gems. The issue is that there is no option to exchange gems and gold for money thought money for gold is illegally supplied by gold sellers. It is true tha both exchange ratres have been going up for some time while most tp prices are goin up at the same rate

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First of all scratch the idea of paying real money for gems. I just got my character to 30 through crafting. I sold my crafted items and started doing dungeons. This is the fastest way to make gold to use as capital. I wait until 1 gold gets me more than 15+ gems before buying them and wait until 15 gems gets me 1+ gold before buying gold using gems. Just continually play the market back and forth and scale the quantities.

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Its always:

(Gems to Gold) * 1,38 = (Gold to Gems)

(Gold to Gems) * 0,72 = (Gems to Gold)

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